When a pipeline company presents a Pipeline Right-of-Way Agreement, the landowner is often told the agreement is “standard.”

In many respects, that is true.

The agreement is usually a standard company-drafted form designed to protect the pipeline company—not the landowner.

That is why one of the most important parts of any pipeline negotiation is the Pipeline Addendum.

The Addendum is where the landowner negotiates:

• additional protections;
• stronger restrictions;
• clearer compensation rights;
• and limitations on the company’s future activities.

Without a strong Addendum, the landowner may sign a Pipeline Agreement that grants broad rights to the company while exposing the property to long-term risk.

What Is a Pipeline Addendum?

A Pipeline Addendum is an additional set of negotiated provisions attached to the company’s form agreement.

The purpose of the Addendum is to:

• modify the company’s standard language;
• add landowner protections;
• eliminate loopholes;
• and clarify the parties’ rights and obligations.

The Addendum is often the most important part of the negotiation.

Why the Company’s Standard Agreement Is NOT Enough

Pipeline agreements are typically drafted by experienced company attorneys.

The agreement is usually designed to:

• maximize company flexibility;
• minimize company liability;
• preserve broad easement rights;
• and limit landowner protections.

A landowner reviewing the company’s initial agreement should assume that:

• important protections are missing;
• broad company rights are included;
• and negotiation is necessary.

Pipeline agreements should not be signed “as is.”

A Good Addendum Is Not Just About Adding More Pages

Many landowners assume that a long Addendum automatically means a strong Addendum.

That is not necessarily true.

An effective Pipeline Addendum is not simply a collection of random clauses. The language must be:

• carefully drafted;
• internally consistent;
• and written to eliminate company-friendly loopholes.

Poorly drafted Addendum language may create ambiguity or fail to accomplish what the landowner intended.

One of the Most Important Issues: Easement Location

The Addendum should specifically define:

• the permanent easement;
• temporary easement;
• temporary work space;
• and access areas.

The agreement should include:

• detailed maps;
• fixed locations;
• and restrictions preventing the company from relocating or expanding the easement without consent.

Undefined easement language creates major long-term risk.

Multiple Pipelines Must Be Addressed

One of the most important Addendum issues is whether the company may install:

• one pipeline;
• multiple pipelines;
• future lines;
• replacement lines;
• or related facilities.

A landowner should never assume the agreement is limited to a single pipeline.

If additional lines are permitted, the Addendum should:

• clearly define the circumstances;
• require additional compensation;
• and limit expansion rights.

Temporary Work Space Must Be Limited

Construction activities may extend far beyond the permanent easement area.

The Addendum should address:

• temporary work space size;
• duration;
• location;
• restoration obligations;
• and compensation.

Undefined “additional temporary work space” language can greatly increase construction impact.

Restoration Obligations Are Critical

Strong restoration language is one of the most valuable parts of a Pipeline Addendum.

The Addendum should address:

• topsoil segregation;
• grading;
• reseeding;
• compaction;
• drainage repair;
• fencing;
• timber damage;
• crop damages;
• erosion control;
• and cleanup obligations.

Without strong restoration language, the landowner may be left with long-term property damage.

Above-Ground Facilities Should Be Strictly Limited

Pipeline companies may seek rights involving:

• valves;
• meters;
• pig launchers;
• pig receivers;
• signs;
• access roads;
• and other above-ground facilities.

These facilities can significantly affect:

• property appearance;
• future development;
• access;
• and property value.

If the landowner does not want above-ground facilities, the Addendum should prohibit or strictly limit them.

Access Rights Must Be Controlled

The company may seek broad ingress and egress rights.

The Addendum should address:

• where the company may enter;
• what roads may be used;
• whether new roads may be built;
• and when access is permitted.

Unlimited access language can create substantial long-term problems.

Compensation Language Should Be Clear

The Addendum should clearly address:

• easement compensation;
• temporary work space compensation;
• crop damages;
• timber damages;
• restoration costs;
• future pipeline payments;
• and compensation for additional facilities.

A landowner should avoid vague compensation language that leaves important issues unresolved.

Assignment Rights Matter

Pipeline agreements often allow assignment to affiliates, successors, purchasers, or operators.

The Addendum should determine:

• whether notice is required;
• whether the original company remains liable;
• and whether future assignees remain bound by all landowner protections.

Assignment rights can significantly affect long-term risk.

Termination Language Can Be Extremely Valuable

Many pipeline agreements are effectively perpetual.

A landowner should consider whether the Addendum should provide:

• automatic termination if the easement is unused;
• release obligations;
• or other limitations on indefinite easement rights.

Unused easements should not burden property forever without review.

The Addendum Is Where the Real Negotiation Happens

The company’s form agreement establishes the company’s preferred position.

The Addendum is where the landowner negotiates:

• property protection;
• leverage;
• compensation;
• and future restrictions.

That is why Pipeline Addendum drafting is one of the most important parts of any pipeline negotiation.

Do Not Assume All Addendum Language Is Effective

Some Addendum provisions appear strong but contain loopholes.

For example:

• broad exception language;
• undefined standards;
• conflicting clauses;
• or company discretion provisions

may weaken the intended protection.

Pipeline Addendum language must be drafted carefully and reviewed as a complete package.

Pipeline Agreements Affect Property for Generations

Unlike many oil and gas leases, pipeline easements may affect property indefinitely.

The agreement may impact:

• future owners;
• future development;
• financing;
• timbering;
• farming;
• subdivision;
• and long-term property use.

A carefully negotiated Addendum can make an enormous difference over time.

Speak With a Pennsylvania Pipeline Attorney Before Signing

Pipeline agreements and Pipeline Addendums should be carefully negotiated before signing.

At The Clark Law Firm, PC, Attorney Doug Clark represents Pennsylvania landowners and gas-rights holders only. He has negotiated Pipeline Right-of-Way Agreements and Addendums involving more than 50 pipeline and gas companies across Pennsylvania.

If you received a Pipeline Right-of-Way Agreement, Pipeline Option Agreement, or Pipeline Addendum, contact pipelineattorney.com before signing.